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Shares of organic light-emitting diode maker Universal Display (OLED) are down $2.83, or over 10%, at $24.50, after the company this evening missed Q3 revenue expectation, and delivered profit that was either above or below consensus, depending on which estimate one uses.

The company slashed its outlook for revenue for the year, citing a fall-off in sales of some mobile products.

Revenue in the three months ended in September rose fractionally from the prior-year period to $32.9 million, yielding EPS of 9 cents.

Analysts had been modeling $37.7 million in revnue. Thomson Reuters estimates called f0r 10 cents per share, while Factset listed 7 cents per share.

CEO Sidney Rosenblatt called the results “strong” and said the use of OLEDs is rising among numerous manufacturers, but that a slip in sales for some mobile devices affected its revenue:

For the first nine months of the year, revenues increased by 39% compared to the same period in 2013 and net income increased by 77% compared to the same period in 2013. This quarter’s sales were softer-than-anticipated due to industry dynamics resulting from weaker-than-expected high-end mobile phone sales and lower host material sales as the result of our host materials not being used in certain new product offerings. We were pleased to see new OLED products introduced during the quarter, which included wearables, tablets, smartphones and TVs. We believe that this growing proliferation of OLED displays is setting the stage for panel makers’ investment plans for 2015 and beyond to increase. Add that to our ongoing advancements with new OLED materials and technologies, we continue to be excited by the robust trajectory projected for the OLED market and our future.

Samsung Electronics (005930KS) is a major customer of Universal’s. It is possible the fall-off in sales of mobile devices may refer at least in part to Samsung’s “Galaxy” line of phones, following weaker mobile results from Samsung recently. Samsung does not, however, pay Universal licensing in the Q3 of any year. Universal noted Samsung paid $25 million in licensing fees in Q2, and is expected to pay the same amount in Q4.

The company saw a decline of 9% in materials sales, “mainly due to lower sales of host materials.”

The company said the OLED industry is still “nascent,” and indicated Q3 trends will affect the growth outlook:

With the OLED industry still in its nascent stage where many variables can have a material impact on its growth, the Company now expects revenues to be in the range of $183 million to $185 million. The revised expectation is based on the assumption that the above noted third quarter customer trends are likely to continue for the remainder of this year.

The company cut its full-year outlook for revenue to $183 million to $185 million, well below a prior forecast for $190 million to $205 million. It is also below the average Street estimate of $203 million.

Update: As one astute reader has pointed out, a second estimate for profit, provided by Factset and some other sources, projected only 7 cents per share. On that basis, Universal actually beats earnings expectations despite the revenue shortfall.

Canaccord Genuity’s Jonathan Dorsheimer today reiterates a Hold rating on shares of organic LED technology Universal Display (OLED), writing that the company may lose as much as $17 million in revenue to Cheil Industries, an affiliate of Samsung Electronics (005930KS) in the display of the Galaxy S5 handset.

Dorsheimer cuts his price target two bucks to $25, after concluding it’s going to be tricky for the company to meet its raised outlook for this year of $190 million to $205 million in revenue.

Writes Dorsheimer, however, he’s not entirely sure what the financial impact may be to Universal, and so he offers a range of possible impacts:

We have conducted a quick analysis to determine the impact of what we believe is a loss of share of green host to Samsung’s Cheil Industries. Given the uncertainty around this call, we are choosing to outline two assumptions, a base case and bear case scenario. In a base case scenario, we assume Universal Display loses 33% of its green host sales in Q3 and Q4 of 2014 and subsequently loses 50% of its green host sales in 2015 and beyond. We are choosing 33% to represent a 50% second source in the Galaxy S5 model and no impact to the legacy S4 model. This scenario has an impact of $8.4M on the top-line in the second half of this year. In 2015 and 2016, this scenario removes $30.4M and $29.4M in annual revenues, respectively. In a more aggressive scenario—our bear case—we assume Universal Display loses 50% of its current green host sales (Q3 and Q4 of 2014) and all of its future green host sales (2015 and beyond). This scenario assumes UDC loses 100% of the green host in the Galaxy S5 model initially and both S4, S5 and future models beyond this year. Under these assumptions, OLED loses $16.7M in 2H14, $60.8M in FY2015, and $58.8M in FY2016.

It appears Universal’s technology may be in Apple‘s (AAPL) Apple Watch, expected sometime in the first half of 2015. But that may not make up for the loss of business with the Galaxy S5, he writes: “While the LGD screen for the Apple Watch may help sentiment, given LGD’s limited capacity and our analysis we see potential benefit of between $1-$2M per Q; clearly not enough to fully offset the Samsung/Cheil impact, in our opinion.”

Analysts today were reflecting on Samsung Electronics’s (005930KS) mobile devices slump, though bulls argue there is little downside to the stock at a recent ₩1,194,000.

All this comes as Samsung gets ready to hold a mobile product unveiling in New York City tomorrow morning.

Macquarie Research’s Daniel Kim reiterates an Outperform rating on Samsung, but cuts his price target to ₩1,500,000 from ₩1,600,000, writing that “mobile gridlock continues” for the company, and that it’s self-inflicted, as the company’s “Galaxy” line of mobile devices hasn’t shown much innovation:

Despite its self-imposed ‘crisis mode’ in the past, our view is that the company rested on its laurels over the last two years. There was little improvement in Galaxy S5, its flagship model, this year compared to Galaxy S4 last year. Its hardware specs are even lagging behind the other premium models’, as seen in the absence of OIS (optical image stabilization), same picture resolution at FHD (no QHD), and lack of eye-catching user interfaces. Accordingly, it failed to splash in the premium market, which is nearly saturated. Difficulty in positioning Galaxy S5 Mini (GS5 Mini) in the mid-range segment. Poorly planned GS5, in our view, had collateral damage, quiet sizeable, on its mid-range smartphone segment. That is, it’s hard to determine the specs of Galaxy S5 Mini and challenging to find a suitable market position. Let’s say, if GS5 Mini specs are too close to GS5, then this will cannibalize GS5 demand. If it was designed as ‘de-spec’ too much from GS5, the phone will be not only no different from the last year’s Galaxy S4 Mini model, but also less competitive against the rivals’ mid-range models. This is why SEC has not launched GS5 Mini phone yet, although it unveiled specs in July 2014. We recall that the company introduced the GS4 Mini just one month after the Galaxy S4’s launch last year.

The company’s response has been “routine,” he thinks, and therefore insufficient:

The management’s response to the deepening crisis seems superficial and too typical – conventional cost-cutting measures such as senior management flying economy class and returning parts of previous performance bonus to the company. A few overseas offices saw changes in their sales representatives and branch managers, while the head of new model development was replaced by a young executive vice president. However, we are not sure if top management is taking a zero-base approach to its faltering handset business and if it has decided which way it is steering, going forward.

Kim also slams the company’s smart watch efforts thus far:

SEC [Samsung Electronics] is regarded as a pioneer in wearable computing devices, having the ‘Galaxy Gear’ in September 2013. The company changed its OS from Google’s Android to its own Tizen for Gear 2 and Gear Fit in May 2014. However, now that Google has introduced the well-designed Android Wear OS in June 2014, designed especially for wearable devices, the risk exists that SEC’s adopting Tizen OS will be another failed attempt for its own OS, just like Bada in 2010 and Tizen so far for smartphones. Moreover, the hardware design looks too ‘digital’, with rectangular shape compared to Motorola’s Moto 360 and LGE’s G Watch R.

Although investors are optimistic about the company’s semiconductor manufacturing business, which serves Apple (AAPL) and others, it is not enough to offset the mobile weakness, especially given more and more chip customers don’t need the bleeding edge of foundry capabilities:

The foundry market amounted to only US$40bn in 2013, a fraction of the smartphone market’s US$338.3n (both are IDC estimates). Moreover, TSMC’s [Taiwan Semiconductor (TSM)] ROIC (around 30%) is just the half of what SEC Mobile has enjoyed over the last few years [...] Die shrink, or geometry migration, has become increasingly difficult and expensive. The pace of fab upgrades to next-generation nodes has been slowing as well. Multiple fabless companies (Nvidia, Broadcom, and IBM) have discussed reducing their investment in leading-edge silicon due to the prohibitive cost structure. That is, costs may be rising for technologies past the 28nm node due to increasing steps in the manufacturing process and increasing design costs for leading-edge nodes. This all boils down to the reduced addressable market size for leading-edge technologies. Furthermore, competition could be even fiercer for a smaller market and SEC’s technology lead should be less relevant than before.

Kim cut his estimates for this year to ₩210.55 billion in revenue and ₩27.697 billion in operating profit, from a prior ₩212.83 billion and ₩29.825 billion, based on reduced expectations for the mobile division.

Fixing things will be difficult, thinks Kim, but he sees support for the stock at the current price:

Although we concede it would not be easy for SEC to overcome its challenges, the rock- bottom level should be Won1.15-1.2mn, only 5-8% from the current share price level. This is based on the 1.0x 2015E book-value level, or the trough P/B ratio seen in the global financial crisis in 2008. So, we believe that the poor 2H14 is already reflected in the share price. The stock price is likely to gain upward momentum, when management comes up with its future Mobile strategy or decides to return its excess cash to investors.

Also today, Susquehanna Financial Group’s Mehdi Hosseini reiterates a “Positive” rating on the shares, and a ₩1,600,500 price target, writing his “checks” of smartphone sales trends for the company are tracking below his expectations, as is pricing:

Checks suggest smart phone unit in 3Q is tracking 87M, +10% Q/Q, or lower than our expectation of 89M (+13% Q/ Q). The high-end mix during 3Q is tracking at 23%, lower than prior expectations of 27%. We also believe the blended smart phone ASP in 3Q is tracking down 12% Q/Q vs. prior expectation of down 3-5%. The ASP pressure is mostly in the China, where even local OEMs rather to avoid due to fast eroding brand premium. LTE market helps, but Samsung’s LTE shipment in CY14 is estimated to account for 80-84M or only 25% of total.

that there is simply a rotation to leadership within the smartphone cycle: This is Apple’s year, next year will be Samsung’s.

Despite all the problems Samsung has faced in commercializing its flexible display technology especially with Note 4, we believe the learning in CY13 and CY14 will help with a smoother refresh next year, especially with GS6. Another analogy is Apple. Apple’s iPhone6 is expected to finally lead to a sizable upgrade cycle, following two years of disappointment with iPhone 5 and iPhone 5c/s. Samsung’s GS4 and GS5 disappointed in CY13 and CY14, but CY15 could be the year of Samsung as it finally mass produces GS6 with flexible display technology.

More specifically, though, the imminent release of the “Galaxy Note 4,” a larger-screen smartphone, is problematic:

We expect Samsung to soon unveil its Note 4, but we don’t expect the initial units to have the so called flexible display. Recent checks suggest Samsung is still facing manufacturing challenges, which is expected to limit Note 4 shipment with flexible display technology to less than 500k in the 4Q time frame. Additionally, Samsung is expected to introduce Galaxy Alpha before year-end, which will most likely incorporate Samsung’s own quad-core AP (Exynos).

As with Macquarie, Hosseini has positive things to say about the chip side of the house:

It appears that after nearly a two year delay, Samsung’s redesigned (quad-core) Application Processor, Exynos, is ready for mass production in 4Q14. Our checks suggest Exynos will be first manufactured on 20nm, which will be the first product for Samsung’s foundry to use a “gate last” architecture. We estimate Samsung’s 20nm capacity to be 5k-10k wpm, which compare to 50k-60k wpm of 28nm gate first capacity. This 5k-10k wpm of 20nm is actually a conversion from 28nm capacity, and is not expected to increase in CY15. Our checks indicate Samsung is planning to have 10k wpm of 14nm FinFET installed (or converted from 28nm) by mid-2015. This will accommodate the migration of Exynos from 20nm to 14nm. As it is well documented, external customers like Qualcomm are currently evaluating Samsung’s 14nm FinFET technology, but they have not yet committed to mass production volume. To that end, we believe the current internal forecast at Samsung is to have 30k-40k wpm of 14nm FinFET installed (including conversion from 20nm) by YE15.

And he’s inclined to stick with the stock based on valuation:

The downside risk to the stock is less than 10%. This is simply based on a book value-based multiple that is trading at historical trough levels (of close to 1x). We don’t expect the company to lose money, and thus the book value is expected to increase. Yes, we expect continued downward revision to the consensus estimates given the stress the mobile division is experiencing. But, we also argue the downside risk is better captured by the book based multiple as EPS est is revised down and thus impacting the P/E multiple.

Jefferies & Co.’s Hyunwoo Doh, reiterating a Buy recommendation on Samsung Electronics (005930KS) shares, and a ₩1,700,000 price target, today writes that the company may miss operating profit expectations for the current quarter, owing to an inventory correction in its mobile devices devision as it clears out low-cost devices from inventory.

Doh is modeling ₩7.93 trillion in operating profit, below a consensus for ₩8.75 trillion, according to FactSet. Without saying what the source of his findings is, he writes that the “IT and Mobile Communications” division of Samsung, known as “IM,” may see a 22.5% drop in profit, quarter to quarter, to ₩5 trillion:

We believe the IM division’s weak earnings have led to a QoQ decrease in operating profit. In our view, despite solid shipments of the Galaxy S5, the IM division will record sluggish earnings, due to inventory correction resulting from high inventory levels of low-to-mid priced smartphones in the distribution channel, after those phones recorded strong shipments in 1Q14.

However, Doh sees more healthy results in the semiconductor and display businesses:

Meanwhile, we expect earnings from the semiconductor division to improve in 2Q14, on: 1) a limited increase in supply, due to DRAM manufacturers’ slowed migration to 25nm process; and 2) improved demand for notebook computers, resulting from continued PC replacement demand (following the end of Windows XP support) and the transfer of demand for tablet PCs toward 2-in-1 PCs. In addition, server demand is increasing substantially, as corporate demand for big data analysis is rising sharply, alongside technological progress in big data technology (e.g. Hadoop, NoSQL). As a result, DRAM demand is also on the rise. In terms of NAND, supply growth is also likely to be limited, due mainly to NAND manufacturers’ wafer input management and the increased portion of SSD. Supply-demand conditions are improving, as a significant increase in server demand has led to a rise in SSD demand. The display division’s earnings are likely to improve, based on increased shipments of ultra-high definition TVs (UHD TV). However, we expect earnings to be lower than our previous estimate, on lower-than-expected improvement in the AMOLED division’s utilization ratio, resulting from sluggish smartphone shipments.

Doh thinks investors should not worry too much about the profit slide. Profit in IM may bounce back in Q3 by 11%, helped by seasonal smartphone demand. Any anyway, the stock fetches what he gauges to be a 1.4 times price to book ,ultisols, whereas he thinks the shares are worth 1.67 times, suggesting href is little downside, in his view.

Shares of Samsung Electronics (005930KS) today closed up ₩18,000 at ₩1,428,000 in Seoul trading, after a couple of positive notes from the Street overnight.

Evercore Partners‘s Rob Cihra initiated coverage of the stock with an Overweight rating, and a ₩1,800,000 price target, writing that “Momentum is lacking as we estimate 2014 revenue -1%Y/Y and EPS -3%Y/Y on slower smartphone growth, but we believe revenue can re-accelerate in 2015 and the unique competitive/economic leverage of Samsung’s vertically-integrated model looks undervalued.”

He notes that “Following a move up 2010-12, Samsung shares have been largely range-bound over the past 2yrs, trading between W1.2-1.5mil.”

The stock is up 4% this year but lagging competitor Apple (AAPL) and lagging the indices the last 12 months quite sharply, as can be seen in the following table from FactSet:

Cihra estimates the company’s mobile division, 59% of revenue, will see a 4% decline in sales this year, before rising 2% next year. The display business may drop 7%, before rebounding 6% next year. Both consumer electronics and semiconductors will rise this year and next, he writes. That would add up to the 1% revenue decline he’s talking about for this year, followed by 3% growth next year.

The best hope for the stock is a higher payout and perhaps a U.S. markets listing, Cihra thinks:

Samsung’s net cash balance stands at W49tn (US$46B), having increased >4X over the past 2 years, and unchecked we forecast this growing to US$90B in another 2 years. Flatter capex should now free up more cash flow for shareholder returns. Samsung prioritizes cash allocation to strategic investments in capex and R&D, yet Y/Y growth in its already-massive capex spend has now moderated to just an average 3% over the past 3yrs and is budgeted flat in 2014. Swing-factors include Samsung now saying it also intends to become more active in strategic M&A, specifically calling out software, but we think that too could interest investors. Likelihood of more generous cash returns. Samsung began moving in this direction, increasing its dividend +79%Y/Y to W14,300 per common share for 2013, which including preferred dividends totaled W2.16tn, yet still just a 7% payout ratio as a percent of net profit, 9% of free cash flow and a 1% dividend yield. For 2014, however, Samsung has said its goal is to “significantly increase” the percentage of FCF allocated to total shareholder returns, even while not yet citing a specific number [...] Potential for ADR: Samsung’s capital structure includes 170mil total shares outstanding (147mil common + 23mil preferred) and it holds 19mil shares of treasury stock (11%) (16mil common + 3mil preferred). Both common (005930) and preferred (005935) trade locally on the Korean Stock Exchange, and a Global Depository Receipt (GDR) for the common is listed on London (SMSN). Samsung has not, however, issued an ADR for the US market, leaving 50% of Samsung common stock to still be held domestically just in Korea. We are not holding our breath for an ADR anytime soon, but believe widening the stock‟s distribution could help its valuation.

This morning, Susquehanna Financial Group‘s Mehdi Hosseinireiterated a “Positive” rating on the shares, writing that smartphone sales this quarter are probably going to fall 7% for the company, but that may not be as bad as it sounds:

Recent checks suggest Samsung’s 2Q smart phone shipment is tracking around 82M units, or down 7% Q/Q and below prior expectations and guidance of 89M, or flat Q/Q. We attribute this 7M shortfall to the low end smart phones where Samsung is impacted by some excess inventory in the channel (particularly in the emerging markets) and some market share loss to China-based competitors. However, demand for Samsung’s high-end smart phones including GS5 has remained strong, which is helping improve this mix from 25-30% in 1Q to 40% in 2Q [...] We remind investors Samsung is not shipping as many GS5 into the channel as they did with GS4 this time last year. This should help minimize the downside risk of excess inventories in 2H14.

Checks suggest total tablet unit shipment in 2Q is tracking at 10-12M, or down 8-23% Q/Q and below our prior expectations of 15M or up 8% Q/Q. The lower tablet shipment is attributed to a combination of longer replacement cycles and increased competition from Taiwan.

Hosseini raised his 2014 revenue estimate ever so slightly to ₩231.53 trillion from ₩231.523 trillion previously, and trimmed his EPS estimate to ₩214,131 per share from ₩214,537 previously.

Chip designer NXP Semiconductor (NXPI) reports Q1 results tomorrow afternoon, after the closing bell, and Raymond James’s Steven Smigie and Pacific Crest’s John Vinh today both weighed in on what to expect.

Consensus for the quarter is $1.23 billion in revenue and 91 cents per share.

Vinh, reiterating an Outperform rating, and a $60 price target, predicts the company will report $1.23 billion and 92 cents, and writes that he sees “multiple growth drivers” for the company:

We continue to see several key catalysts driving growth, including (1) NFC share gains in Samsung Galaxy S5, which we expect to offset near-term weakness at Apple; (2) improving automotive demand; (3) accelerating deployments of Chinese LTE, with more than 500,000 base stations to be deployed in 2014, and (4) continued ramp of Chinese bank cards following a pause in demand. We view this as a significant opportunity with a TAM of over 1 billion banking cards in China and expect demand to resume in 1H14.

He likes the valuation, too, writing “we still view shares as attractively valued with the stock trading at 12.3x our 2015 EPS estimate of $4.86 versus its peer-group multiple of 16x-17x.”

Smigie, reiterating a Strong Buy rating, and raising his price target a buck to $69, predicts the same $1.23 billion and 92 cents, citing reports from Fairchild Semiconductor (FCS) and Linear Technology (LLTC), and also payoff from the new Samsung Electronics (005930KS) Galaxy S5 smartphone:

The first couple of companies in our space, Linear Technology and Fairchild discussed positive trends in the auto, industrial, telecom and mobile markets, when they reported last week. All these positive trends should benefit NXP as well. We think NXP should do better than Linear and Fairchild in these markets, however, given recent design wins. One place where NXP did well is with Samsung’s Galaxy S5. NXP announced last week its LifeVibes VoiceExperience, which is in the Galaxy S5, where it helps suppress background noise during phone calls. In addition, earlier this month, a recent teardown of the Galaxy S5 by Chipworks confirmed NXP won back its NFC controller from Broadcom. The secure element win was a mild surprise (though some regions may not use a secure element).

Shares of chip maker Qualcomm (QCOM) are up a penny at $79.15 after Credit Suisse’s Kulbinder Garcha became became the latest individual to trumpet the company’s strength in the baseband processor market.

Garcha thinks Qualcomm’s fiscal Q2 report on April 24th is a story of weaker Apple (AAPL) contributions balanced by a payoff from Samsung Electronics’s (005930KS) Galaxy S5 smartphone:

For F2Q14, we forecast total MSM unit volume of 187mn (+6% q/q/+8% y/y) and segment revenue of $4.1bn (-10.6% q/q/+5.4% y/y). While the concerns on weak Apple volume are an overhang, the ramp of Galaxy S5 should be able to offset the impact. Additionally, Snapdragon 400 has gained great traction in China as LTE adoption is accelerating there. Furthermore, recent strong sales from TSMC also bode well for Qualcomm. Long term, we expect QCT’s revenue share will expand to 48% from 45% in 2013. As handset vendors continue to increase portfolio exposure to LTE phones, we think Qualcomm will be able to win more incremental content dollars driven by innovations such as RF360.

The licensing business, meanwhile, is going to benefit from expansion of smartphone volume in the lower price tiers:

For F2Q14, we expect QTL revenue of $2.3bn (+19% q/q/+10.3% y/y) driven by device volumes of 310mn (+11.8% q/q/+10.3% y/y) and ASPs of $222 (+0.1% q/q/+2.1% y/y). In our view, QTL (~70% of group EBT) will grow 14% in FY14 driven by robust smartphone unit growth of 22% in CY14. While the high-end smartphone growth has decelerated, we have already captured this in our estimates and believe the accelerating shift from feature phones to smartphones provides licensing volume upside. We forecast ASP’s of $223/$218 in FY14/15 (-0.8%/-2.2% y/y).

Garcha thinks Qualcomm will see revenue in line with the consensus $6.5 billion, but perhaps a penny beat on the bottom line, at $1.23.

Nasdaq Composite has recovered from Thursday’s and Friday’ssell-off, currently up 47.81, or 1.2%, at 4,047.54.

Shares of Microsoft (MSFT) are up 8 cents at $39.29, despite Deutsche Bank’s Karl Keirstead today cutting his rating on the stock to Hold from Buy, writing that many “catalysts have now played out,” including a “stabilizing PC market” and “share gains in enterprise software” and improving sentiment.

Among things that could hurt Microsoft going forward, writes Keirstead, “The Nokia deal should close any day now and in our view Street EPS estimates will be biased down.” Also, “we worry that business PC momentum could moderate post XP migrations and that Windows pricing pressure will continue.”

Shares of Yahoo! (YHOO) are up 79 cents, or 2.4%, at $33.66, after SunTrust Robinson Humphrey’s RobPeck raised his rating on the shares to Buy from Neutral, and set a $40 price target, writing that a 13% pullback in the shares had created an opportunity for 21% upside.

“Our analysis indicates that after adjusting for Yahoo!’s ownership of Yahoo! Japan and Alibaba, that investors are essentially getting the core Yahoo! asset for free. Taking the taxed current market value for Yahoo! Japan (which is down ~18% in the last month) and assuming a $150b IPO for Alibaba with a $200b ultimate value for Yahoo!’s stub remaining position accounts for $29 per share for Yahoo.”

Samsung Electronics (005930KS) released its Galaxy S5 to general availability on Friday, and while the company doesn’t always disclose official sales figures, some of the analysts covering the component makers were attempting to triangulate how they think the GS5 will affect suppliers.

Needham & Co.’s Rajvindra Gill today reiterates a Buy rating on shares of chip maker Synaptics (SYNA), maker of the fingerprint sensor in the GS5. That stock is up up $2.78, or almost 5%, at $58.66. Writes Gill, GS5 sales seem to be proceeding better than the predecessor S4, citing media reports form South Korea suggesting “Total of 120k units have been sold domestically thus far and overseas sales also off to a better start than the GS4. Could reach 10m mark two days faster than the GS4 (which took 27 days).”

Gill thinks better-than-expected GS 5 results should boost Synaptics after a 9% drop in the last week over fears about the phone.

Likewise, John Vinh of Pacific Crest today reiterates a positive view on Synaptics, NXP Semiconductor (NXPI), Avago Technologies (AVGO), ARM Holdings (ARMH), InvenSense (INVN), and Maxim Integrated Products (MXIM), writing that “Our U.S. carrier checks indicate first-day sell-through of Samsung’s Galaxy S5 smartphones was in line with our expectations, with average sell-through rate reaching 60% within four hours of launch. We found the highest sell-through rate at Verizon, driven by “buy one, get one free” promotions, with multiple stores indicating stock-outs within a few hours of launch.”

As for Samsung itself, however, Bernstein Research’s Mark Newman, who has an Outperform rating on the shares, today takes a look at “valuation enigma,” as he puts it, writing that “In short, no matter how we look at it, we come up with the same conclusion: the KRW 1.2-1.4M range that the share price has been bound to since mid-2013 is an anomaly that has to correct over time.”

In fact, on a sum of the parts basis, the market is assigning a negative value to Samsung’s smartphone and tablet business unit, he writes. Newman concludes the problem is “Samsung’s lack of cash return to investors and other technical issues holding Samsung back,” even though the company makes enough cash to buy back 41% of its stock and still have plenty left over.”

Samsung shares today closed up ₩5,000 at ₩1,370,000 in Seoul trading.

Speaking of smartphones, Jefferies & Company’s Peter Misek today reiterates a Buy rating on Apple (AAPL) shares, and a $625 price target, writing “Apple has started negotiating with carriers on a $100 iPhone 6 price increase. The initial response has been no, but there seems to be an admission that there is no other game-changing device this year.”

Misek thinks carriers and consumers would end up splitting the higher cost of an iPhone 6 and that the extra money would offset higher costs for the phone, “removing a major bear argument.”

Apple stock today is up 73 cents at $520.34.

BMO Capital Markets’s Keith Bachman reiterates a Market Perform rating on shares of International Business Machines (IBM), and a $195 price target, writing that the company will probably see sales fall 1% this year, and that “Given that many other tech companies with negative top-line growth rates trade for P/E multiples of 9x-11x, we find it hard to believe that IBM shares will break out meaningfully.”

But, “If IBM can reach the sale of the x86 server business and potentially the semiconductor business, we think this would help the IBM story. “

Shares of Facebook (FB) are up $1.50, or 2.6%, at $60.03, after Topeka Capital Markets’s Victor Anthony today reiterated a Buy rating on the shares, and a $75 price target, writing that “we believe it is a matter of when, not if, Facebook enters China. As such, we are adding entry into China, the world’s largest Internet market, as a long-term catalyst for Facebook.”

Writes Anthony, “A Chinese language monthly magazine named Business Value, posted a screen shot of Facebook’s job opening for language specialists in simplified Chinese [...] Website Want China Times has a translation of the article Job ad suggests Facebook planning to enter China and the original article in Chinese in Business Value can be found here: What Facebook Wants To Do In China.”

Barclays’s chip analyst Blayne Curtis today reitrerates Overweight ratings on shares of Maxim Integrated Products (MXIM) and Silicon Labs (SLAB), and an Equal Weight rating on shares of Analog Devices (ADI), writing that Maxim is the biggest winner thus far in the race to put biometric sensors into mobile devices, while the other two can look forward to “incremental opportunities.”

Shares of Analog Devices are up 36 cents, or 0.7%, at $53.28, while Maxim shares are down 9 cents at $32.59 and SLAB is off 72 cents, or 1.4%, at $50.84.

Curtis writes that with the help of semiconductor market research firm Chipworks, he has confirmed Maxim is supplying the “pulse/oximeter” sensor for SamsungElectronics‘s (005930KS) Galaxy S5, which was introduced at the Mobile World Congress trade show back at the end of February. That device lets one measure one’s heart rate by putting one’s finger tip in front of the camera flash on the back face of the phone:

We were able to confirm two sockets, the MAX77804 (system PSoC, status quo), and the MAX77826, which is likely a battery or power component, but not the incremental pulse/oxy sensor. Our initial teardown work revealed the LEDs required to perform this functionality, but the supporting silicon was not clear. We have since been able to confirm this content, and now have incremental confidence that the overall MXIM content increases are intact, which will likely lead to positive earnings revisions.

For those of you playing at home, Curtis offers the following image taken of the Maxim part:

Regarding Analog Devices, they may be in another Samsung gadget unveiled at the same event, the “Gear Fit” bracelet:

We believe ADI has secured the bio-sensor in Samsung’s Gear Fit. ADI uses green LEDs (vs Red), which are better suited to overcome the motion artifacts associate with a watch moving around on your wrist (MXIM sensor in the GS5 is based on a red LED, which is more accurate). We estimate this is a roughly $3-4M opportunity, assuming 6-8M Gear watches this year, with the Gear Fit getting the majority of the volume. While not enough to move the dial for ADI, we do believe it has further opportunities in both phones and wearables/watches.

And Silicon Labs may have an ultraviolet light sensor in a forthcoming, much-rumored Apple (AAPL) “iWatch” wrist band, he thinks:

Silicon Labs recently announced a family of products featuring the industry’s first digital ultraviolet index sensors (press release). These chips measure UV exposure to aid those with elevated risk of sunburn or just a general concern about excessive sun exposure, and we believe they may be of appealing to OEMs looking to differentiate in a crowded market. To that end, while these products have seen little public hype thus far, we believe SLAB has a win in Apple’s upcoming iWatch (late 2H14 or early 2015). Timing of the iWatch seems in flux, but if it comes this year, we estimate it at an opportunity worth $2-4M in revenue ($0.01-0.02 in EPS) in 2H, assuming an ASP of ~$0.40 and 5-10M iWatches.

Shares of Apple (AAPL) are down $2.98, or half a percent, at $539.67, as the Street continues to debate the likely effect of the next iPhone on profit and sales.

On the bull side, Canaccord Genuity‘s Mike Walkley this morning reiterated a Buy rating, and a $600 price target, writing that his survey data for smartphone buying in tentions in March suggest that sales of Android-based smartphones were a bit softer in March than had been expected for usual seasonal patterns, which he attributes to people holding out for the newest models, HTC‘s (2498TW) “HTC ONE M8,” revealed last week, and Samsung Electronics’s (005930KS) Galaxy S5, which goes on sale next week:

Our March surveys indicated gradually increasing customer and carrier store representative interest in and pre-order activity for the Samsung Galaxy S5 at all four tier 1 carriers and for the new HTC One (M8) at AT&T, T-Mobile and Sprint. With these flagship smartphones from Samsung and HTC expected to ramp in retail channels during April, we anticipate high-end Android smartphones should gain share versus the iPhone during the June quarter.

However, he expects things to shift back in Apple’s favor in the fall with the introduction of larger-screen iPhone models. That’s not just because of pent-up demand for larger models. Walkley also thinks Apple will be helped by more and more carriers offering early-upgrade options:

While our surveys indicated early upgrade option plans are gradually gaining momentum, we anticipate stronger take up rates once current subscribers reach the end of their 24 month contracts. In fact, despite strong initial adoption of these early upgrade plans, our surveys indicated certain carrier policies were still inhibiting faster adoption of these plans by incentivizing existing post-paid subscribers to complete the duration of their existing contracts. Through requiring device trade-ins for consumers at the end of the 2 year contracts or providing insufficient early-termination payoff options, carriers made it more attractive for post-paid subscribers to complete their 2 year contracts versus immediately transitioning to an early upgrade plan. With our surveys indicating strong customer loyalty for the iPhone, we believe Apple could strongly benefit from a broader adoption of these early upgrade plans. Further, with these plans facilitating annual upgrades to new smartphones, we believe these plans in the coming years could in fact boost iPhone replacement sales and help Apple grow sales in the more saturated and mature developed countries that sell a greater mix of high-end smartphones.

In sum, “Given strong iPhone and iPad customer loyalty, we believe a new larger screen iPhone and iPad should create a very strong upgrade cycle in North America in H2/C2014 given the timing of grandfathering in 2 year plans, and globally given the popularity of larger screen smartphones and tablets.”

Walkley’s enthusiasm is matched by skepticism from BerenbergEquity Research‘s Adnaan Ahmad and Jean Beaubois, who reiterate a Sell rating on Apple shares today, writing that some investors are hoping Apple’s P/E multiple goes higher on the release of new devices, but they may be hoping in vain.

Beaubois writes that many companies have seen their price-to-earnings multiple expand greatly upon the release of a flagship phone, and Ahmad provide the following (somewhat blurry) table of those P/E changes:

1) these product cycles are not sustainable; P/Es re-rate but then de-rate 2) competition has intensified and differentiation has become very hard 3) there can be exceptions (Samsung’s Galaxy S4 launch) 4) the re-rating periods are shortening. And that is one of the reasons why he thinks Apple is a SELL .. But assuming Apple’s rating moves from 12.7x pe-14 to 15x on that “hope” trade, that would imply that Apple can go up another 18% to $642 versus previous peak @ $700 (I find it hard to resist!)

Reflecting on potential arms merchants to Apple, Beaubois notes that Dialog Semiconductor (DLG) is supposed to be the “sole supplier of customer power management chip to Apple.”

Another one is AMS AG (AMSSW), which is the supplier of light and motion detection censors [sic] as well as mems microphones. Could also sell heart censor and nfc booster in iP6.”

Writes Beaubous, “Personally my favourite one is AMS for the potential to sell ‘more’ into the iP6 with its heart monitoring sensor and nfc booster (needed as the iPhone has a metallic casing).”

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.